Video: Royal Mail faces strike over plans to cut 1,600 jobs

ROYAL Mail is facing the threat of industrial action just months after its controversial privatisation after unveiling “ruthless” plans to axe 1,600 jobs.

The company came under fire for revealing a new efficiency programme aimed at saving £50 million a year, saying it was needed to compete effectively with its rivals.

Royal Mail is consulting on plans to cut 1,600 jobs

Unite accused Royal Mail of “ruthlessly sacrificing jobs” and warned of industrial action.

The job losses will largely involve operational and head office managerial positions, not frontline postal workers.

The company, which floated on the London Stock Exchange last year, said 300 new posts would also be created, leaving a net reduction of 1,300 roles.

Brian Scott, national officer of Unite, said: “First the Government sells off Royal Mail on the cheap and now the newly privatised service is ruthlessly sacrificing jobs.

“We do not believe that it’s a coincidence that this announcement has been made just before the company prepares to announce its first full set of accounts since privatisation.

“It’s more proof that Royal Mail’s primary reason for existing is now about making profits rather than serving the nation.

“For all that Royal Mail managers have been through they do not deserve to be treated in this way.

“Unite is demanding a commitment to no compulsory redundancies on fair terms and an effective method for redeployment within the restructured organisation. If Royal Mail refuse, we will have no alternative than to consider a ballot for industrial action.”

The Communication Workers Union (CWU), which was embroiled in a bitter row last year over privatisation which almost led to a strike, said Royal Mail had stressed that job losses will largely involve management positions.

Potential job losses among CWU-represented administrative grades were fewer than 5%, said the union.

CWU deputy general secretary Dave Ward said: “We have begun formal discussions with Royal Mail about the impact these job losses will have on our members but it is clear that the majority of the job cuts will be to managerial positions.

“Royal Mail has confirmed to us that there will be no compulsory redundancies of permanent employees and that today’s announcement has no impact on CWU operational frontline grades.

“However, we will fight to protect jobs and do all we can to minimise the impact of job losses on CWU grades.”

Ian Murray, shadow minister for trade and investment, said: “No-one wants to see job losses and today’s announcement will be unwelcome news for Royal Mail’s employees. It is crucial that Royal Mail’s management works closely with employees and unions to mitigate the impact of these changes and to prevent redundancies.

“Recent reports that Royal Mail’s chief executive could be set to receive a bumper payout will rub salt into the wound for those set to lose their jobs. We are clear that the Government needs to use its remaining stake in the business to promote fairness and a long-term approach.

“David Cameron’s Royal Mail fire sale last year lost the taxpayer hundreds of millions of pounds and put the future of vital services at risk. The taxpayer has been left short changed at a time when services are being cut and families are struggling with David Cameron’s cost-of-living crisis.”

Since 2003, 50,000 employees have left Royal Mail, which stressed it had a strong record of “achieving change through natural turnover, redeployment and voluntary redundancy wherever possible”.

“We need to do so in order to effectively compete in the letters and parcels markets. This is the best way to ensure the continued delivery of the universal service and the good-quality jobs we provide for our people.”

The announcement comes just three months after Royal Mail struck an agreement with union leaders on pay, pensions and other issues linked to the privatisation.

Under the deal between the CWU and the company, which averted strikes, more than 130,000 employees would receive a three-year pay rise worth around 9% and legally-binding employment protections.

But there has been controversy over the salary of Ms Greene, amid recent reports that Business Secretary Vince Cable wants to block any rise of more than 3% for the chief executive. The Government still owns a substantial chunk of the company.

Labour has accused the Government of a “botched privatisation” of Royal Mail, saying taxpayers have been short-changed by hundreds of millions of pounds.

The market value of the company soared on privatisation last October, when shares were valued at 330p, though Mr Cable dismissed the steep rise when they began trading as “froth”.

However, they have remained well above £5, helping the company enter the FTSE 100 index of top London-listed companies by valuation.